| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES BASIS OF PRESENTATION The accompanying
unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the
United States of America (US GAAP). All intercompany transactions and accounts have been eliminated in
consolidation. This basis of accounting differs from that used in the statutory accounts of the Company, which are prepared in
accordance with the Accounting Principle of China (PRC GAAP). The unaudited
consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United
States of America for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X of
the United States Securities and Exchange Commission (SEC). Accordingly, they do not contain all information and
footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.
In the opinion of the Companys management, the accompanying unaudited consolidated financial statements contain all the
adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of
March 31, 2016 and the results of operations and cash flows for the periods presented. The results of operations for the three
and nine months ended March 31, 2016 are not necessarily indicative of the operating results for the full fiscal year or any future
period. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related
notes thereto included in the form 8-K filed with the SEC on November 3, 2015. Use of estimates The preparation
of financial statements in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates. The significant areas requiring the use of management estimates include,
but are not limited to, estimated useful life and residual value of property, plant and equipment, provision for staff benefit,
recognition and measurement of deferred income taxes and valuation allowance for deferred tax assets. Although these estimates
are based on managements knowledge of current events and actions management may undertake in the future, actual results
may ultimately differ from those estimates and such differences may be material to our consolidated financial statements. START-UP
COSTS In accordance with ASC 720, Start-up
Costs, the Company expenses all costs incurred in connection with the start-up and organization of the Company. PROPERTY AND EQUIPMENT Property and equipment are stated
at cost, less accumulated depreciation. Major repairs and improvements that significantly extend original useful lives or improve
productivity are capitalized and depreciated over the period benefited. Maintenance and repairs are expensed as incurred. When
property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the
respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using
the straight-line method over estimated useful lives as follows:
Furniture and fixtures 5-10 years
Office equipment 3-5 years Leasehold improvements are depreciated
on a straight-line method over the shorter of estimated useful lives or lease terms. Intangible Assets Intangible assets with finite
lives are amortized using the straight-line method over their estimated period of benefit. Evaluation of the recoverability of
intangible assets is made to take into account events or circumstances that warrant revised estimates of useful lives or that indicate
that impairment exists. All of our intangible assets are subject to amortization. No impairment of intangible assets has been identified
as of the balance sheet dates. Intangible assets include licenses
and certificates and are amortized over their useful life of five years. FAIR VALUE MEASUREMENTS AND DISCLOSURES FASB ASC Topic 820, Fair Value
Measurements, defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement
that enhances disclosure requirements for fair value measures. The three levels are defined as follows:
● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. Certain of the Companys financial
instruments, including cash, accrued expenses and other payables, are carried at costs, which approximate their fair values due
to their short maturities. As of March 31, 2016, the Company did
not identify any assets and liabilities that are required to be presented on the balance sheet at fair value on a recurring basis. IMPAIRMENT OF LONG-LIVED ASSETS In accordance with the Financial Accounting
Standards Board (FASB) Accounting Standards Codification (ASC) 360-10, Accounting for the Impairment
or Disposal of Long-Lived Assets, long-lived assets such as property, plant and equipment are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, or it is reasonably possible
that these assets could become impaired as a result of technological or other industrial changes. The determination of recoverability
of assets to be held and used is made by comparing the carrying amount of an asset to future undiscounted cash flows to be generated
by the assets. If such assets are considered to be
impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair
value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell.
During the reporting periods there was no impairment loss recognized on long-lived assets. REVENUE
RECOGNITION The Company recognizes revenues from
professional services contracts. Customers are billed, according to individual agreements. Revenues from professional services
are recognized on a completed-contract basis, in accordance with ASC Topic 605-35, Construction-Type and Production-Type
Contracts. Under the completed-contract basis, contract costs are recorded to projects in process and billings and/or cash
received are recorded to a deferred revenue liability account during the periods of construction. Costs include direct material,
direct labor and subcontract labor. All revenues, costs, and profits are recognized in operations upon completion of the contract.
A contract is considered completed when all costs except insignificant items have been incurred and final acceptance has been received
from the customer. Corporate general and administrative expenses are charged to the periods as incurred. However, in the event
a loss on a contract is foreseen, the Company will recognize the loss as incurred. For uncompleted contracts, the deferred asset
(accumulated contract costs) in excess of the deferred liability (billings and/or cash received) is classified under current assets
as costs in excess of billings on uncompleted contracts. The deferred liability (billings and/or cash received) in excess of the
deferred asset (accumulated contract costs) is classified under current liabilities as billings in excess of costs on uncompleted
contracts. Contract retentions are included in accounts receivable. INCOME TAXES The Company uses the asset and liability
method of accounting for income taxes in accordance with ASC Topic 740, Income Taxes. Under this method, income tax
expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences
of temporary differences resulting from matters that have been recognized in an entitys financial statements or tax returns.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change
in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is
provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it
is more likely than not some portion or all of the deferred tax assets will not be realized. ASC Topic 740.10.30 clarifies the accounting
for uncertainty in income taxes recognized in an enterprises financial statements and prescribes a recognition threshold
and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken
in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods
presented. CONCENTRATION
OF CREDIT RISK The Company maintains cash in
accounts with state-owned banks within the PRC. Cash in state-owned banks is not covered by insurance. Should any of these institutions
holding the Companys cash become insolvent, or if the Company is unable to withdraw funds for any reason, the Company could
lose the cash on deposit with that institution. The Company has not experienced any losses in such accounts and believes it is
not exposed to any risks on its cash in these bank accounts. FOREIGN CURRENCY TRANSLATION AND COMPREHENSIVE INCOME
(LOSS) The accounts
of the Companys Chinese subsidiary are maintained in RMB and the accounts of the U.S. parent company are maintained in USD.
The accounts of the Chinese subsidiary were translated into USD in accordance with Accounting Standards Codification (ASC)
Topic 830 Foreign Currency Matters. All assets and liabilities were translated at the exchange rate on the balance
sheet date; stockholders equity is translated at historical rates and statement of income items are translated at the weighted
average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance
with ASC Topic 220, Comprehensive Income. Gains and losses resulting from the foreign currency transactions are reflected
in the statements of income. The Company follows FASB ASC Topic 220-10,
Comprehensive Income. Comprehensive income comprises net income and all changes to the statements of stockholders
equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. RECENT
ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting
Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with
Customers: Topic 606. This Update affects any entity that either enters into contracts with customers to transfer goods or services
or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards.
The guidance in this Update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition and most industry-specific
guidance. The core principle of the guidance is that an entity should recognize revenue to illustrate the transfer of promised
goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange
for those goods or services. The new guidance also includes a cohesive set of disclosure requirements that will provide users of
financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows
arising from a reporting organization's contracts with customers. This ASU is effective for fiscal years, and interim periods within
those years beginning after December 15, 2016 for public companies and 2017 for non-public entities. Management is evaluating the
effect, if any, on the Company's financial position and results of operations. In April 2015, the FASB issued ASU No. 2015-05,
IntangiblesGoodwill and OtherInternal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud
Computing Arrangement. The amendments in this ASU provide guidance that will help entities evaluate the accounting for fees paid
by a customer in a cloud computing arrangement, including whether a cloud computing arrangement includes a software license. If
a cloud computing arrangement includes a software license, then the customer should account for the software license consistent
with the acquisition of other software licenses; otherwise, the customer should account for the arrangement as a service contract.
The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15,
2015. Entities can elect to adopt the amendments either prospectively to all arrangements entered into after the effective date
or retrospectively to all prior periods. The Company does not expect the adoption of the amendment in this ASU to have a significant
impact on the Company's consolidated financial statements. In August 2015, the FASB issued
ASU No. 2015-15, Interest-Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated
with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting,
which addresses line-of-credit arrangements that were omitted from ASU 2015-03 (see above). This Update states that the SEC
staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an
asset and subsequently amortizing those costs ratably over the term of the arrangement, regardless of whether there are any outstanding
borrowings on the line-of-credit arrangement. The Company does not believe the adoption of this guidance will have a significant
impact on the Company's consolidated financial statements. |
